London benchmark white sugar futures closed near a 17-month low on Friday on fund and trade selling sparked by persisting worries about the global sugar surplus, dealers said. August pared losses to end down $3.20 at $309.90 per tonne in steady volume of 4,605 lots, having moved between $314.90 and $308.50.
The lowest for a front-month contract since 30 November, 2005. October was down $3.10 at $302.50 in volume of 1,142 lots, having also hit a contract low of $301.10. "We thought it was funds selling, but apparently there's a mixture of trade in there as well...they seem to be selling August and buying New York," a dealer said.
Although London futures had slightly recovered in earlier trading on short covering, dealers said concerns over the long-term outlook for sugar supply dominated. Sugar prices have fallen behind in the wider commodities boom because of a swift move back to plentiful supply after a period of shortage. One dealer said India's plan to give mills a two million tonne sugar buffer zone and offer them incentives to export had added to the bearish sentiment.
COCOA ENDS HIGHER: London cocoa futures finished higher on Friday after rebounding from an earlier five-week low, boosted by trade buying, dealers said. July finished up 20 pounds at 1,020 pounds a tonne after touching 976 pounds, the lowest for the second position since March 14.
"We've had trade-type buying," one dealer said, adding there could have been industry demand following the sharp drop in prices late this week. Total volume was a routine 15,921 lots. July fell almost five percent on Thursday, weakened by fund and speculative selling.
Dealers noted the market had weakened shortly after midday with stops triggered when the market dipped below 991 pounds, a double bottom for the July contract hit on March 16 and 19. Trade buying and pre-weekend profit-taking on short positions contributed to the recovery, they added.
US cocoa grindings in the first quarter fell 6.79 percent from a year ago to 97,584 tonnes, the Chocolate Manufacturers Association of the USA and New York Board of Trade said on Friday.
COFFEE ENDS HIGHER: London robusta coffee futures ended higher on Friday as the market edged towards the upper end of its recent range on industry and speculative buying, dealers said. Benchmark July finished up $14 at $1,612 a tonne after trading from $1,613 to $1,595.
Total volume was 15,257 lots, boosted by rolling forward of positions out of May. The front month becomes tenderable on May 1. Brokers Sucden UK said in a market report that London looked set for a rally, with heavy Vietnamese shipments well absorbed by industry demand "but the big question is where the buying will come from to push us through the elusive $1,615 area."
Dealers said producer selling was helping to keep a lid on prices. "We seem to be constantly stuck in ranges," one dealer said Rwandan coffee farmers on Friday decried a low crop output as harvesting in the tiny central African nation starts.